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ABSTRACT: For decades,1 healthcare providers have complained about inadequate reimbursement. Third-party payers, government health plans, and employee health plan sponsors have complained the cost of health plan claims and premiums. Patients have complained about access to healthcare providers, balance billing, and surprise billing. Economists, health policy academics, medical society leaders, and others have offered solutions, many of which have been implemented with little to no impact. An analysis to determine whether a free-market, non-regulatory solution might successfully address cost, balance billing, and surprise billing revealed that 98 percent of the claims reviewed could be and were reduced by an average of $22,666 per claim with rare balance billing and no surprise billing. These results, if applied across all U.S. ERISA health plans, would save approximately $83 billion annually - $28 billion on out-of-network claims and $55 billion on in-network claims.
ANNUAL PREMIUMS ROSE 5 PERCENT TO AN average of $20,576 for an employer-provided family plan In 2019, according to a survey of employers by the nonprofit Kaiser Family Foundation. On average, employers assumed 71 percent of that cost, and employees paid the rest.2
There is much confusion regarding balance billing and surprise billing in healthcare. Surprise billing, the receipt of an unexpected invoice for an amount above an expected balance bill, has dramatically increased in recent years.3 Reports of unexpected charges equal to or exceeding a family's annual income have become commonplace. State and federal legislatures are exploring solutions that will affect all patients, providers, and payers rather than focusing on the providers contributing to these problems. If the problem providers are not investigated, the proposed solutions will likely result in increased costs for all.
Balance billing is the provider's charge after the insured patient's health plan has paid according to the plan benefits. Some plans do not include the deductible and coinsurance within balance billing, but in general, balance billing covers the insured patient's obligation to pay for any items or services not paid for by the plan. This may be due to the individual (or family) component of the plan's benefits or the particulars of the plan language, e.g., "items not medically necessary," as that term is defined in their plan. For example, the plan may have the following benefits: In-network -...